Articles Posted inWetlands

An executive order signed by President Donald Trump in February may have major large impact on the way that wetlands are regulated at the federal level. The executive order rescinds a Clean Water Rule put in place during the Obama administration. To find out how this change could impact wetland regulation at both the federal level and in California, GlobeSt.com sat down with Scott Birkey, partner at Cox, Castle & Nicholson, for an exclusive interview.

GlobeSt.com: How has the Trump administration affected wetland regulations on a federal level?

Scott Birkey: This story is still being written, but the new administration started setting the stage last February when Trump issued an Executive Order asking the two federal agencies that regulate wetlands on the federal level, the Army Corps of Engineers and the Environmental Protection Agency, to review and essentially rescind the Clean Water Rule established during the Obama administration. By many accounts, the Rule expands the scope of those agencies’ permitting jurisdiction over wet features, even those features that arguably wouldn’t be considered wetlands in any normal sense of the word. The real turning point in this saga is yet to come, but we have a pretty good idea of what it will look like. The Order includes a seemingly innocuous paragraph that could trigger sweeping changes in the way wetlands will be regulated at the federal level. It requires the agencies to interpret the phrase “navigable waters” consistent with the views of Justice Scalia, who relied on Webster’s dictionary to conclude “waters” are “relatively permanent, standing, or continuously flowing bodies of water.” Compared to the Clean Water Rule and all other prior iterations of the wetland regulations, this view reflects a significant restraint on the agencies’ wetlands permitting authority.

GlobeSt.com: How might this affect the Obama administration’s Clean Water Rule?

Birkey: The wheels are already in motion to jettison and replace the Obama-era Clean Water Rule with regulations that would significantly restrain the federal government’s scope of permitting authority over the fill of wetlands. What’s somewhat ironic is that the Clean Water Rule emerged to help clarify, at least ostensibly, the confusion created by a string of well-known wetland regulation cases decided by the Supreme Court. As a practical matter, I doubt that Scalia’s more commonsensical approach to defining “waters,”—which in turn establishes the sideboards for the agencies’ jurisdictional reach—will itself be that easy to implement, regulate, or enforce. We’re sure to see more litigation over this wordplay. This all may sound inane, but the fact is that tagging the phrases “navigable waters” or “waters of the United States” to wet features on a piece of property proposed for development can saddle that project with permitting hurdles that could result in significant time delays and costs.

GlobeSt.com: What does this mean for wetland regulations in California?

Birkey: I and others have written elsewhere that the guiding principle here is nature abhors a vacuum. What we’re likely to see is the state becoming more emboldened to fill regulatory gaps created by the new federal administration’s pullback from regulating wetlands. This is almost a certainty, given that the state has been working for over a decade on a set of wetland regulations that would specifically apply to those wetlands that are not classified as federal “waters of the United States” subject to permitting authority under the Clean Water Act. The State Water Resources Control Board issued a preliminary draft of the regulations in July 2017. The Board anticipates approving the regulations by winter 2017, which under normal circumstances is fairly aggressive in light of the controversy the regulations have generated, but because of the federal pullback from wetland regulations, that timeframe could be an almost certainty. Put simply, this federal pullback likely will result in a state pushback, where California acts more aggressively to ensure the wetlands left behind after Trump’s re-write of the wetland regulations will be regulated by the state.

GlobeSt.com: Can we expect another layer of regulatory oversight in the state?

Birkey: Absolutely, and that’s really the point of the state’s new wetland regulations. To be fair, the state previously has had the ability to regulate wetlands deemed “waters of the state.” But the state’s new wetland regulations will create a permitting mechanism almost identical to the federal permitting regime, mirroring the relatively onerous and time-consuming protocols currently used by the Corps to process wetland fill permits. So, for example, we can expect to see the state requiring applicants to justify their project is the “least environmentally damaging practicable alternative,” or “LEDPA,” an almost magical, albeit clunky, formulation that’s needed before a wetland fill application can be approved. The process to reach this determination requires significant documentation and environmental analysis, including a boundary delineation of the wetlands, an assessment of off-site and on-site alternatives to the proposed project, a review of the project’s other environmental impacts, and a description of compensatory mitigation to offset the project’s impacts. This level of processing and documentation is a sea change from what we’re used to seeing in the state. And so, from that perspective, the new regulations are effectively another layer of regulatory oversight in the state.

GlobeSt.com: How will this regulatory change affect developers with ongoing projects, and what do developers need to know?

Birkey: The draft regulations include a placeholder for their effective date, and so we don’t know yet when they’ll apply. For developers with projects proposing wetland fills after the effective date—get ready! You’ll see a new and heightened level of state agency scrutiny bringing with it increased compliance costs and time delays. Those of us familiar with the Corps’ permitting process know how onerous it can be to obtain a Section 404 permit—think wetland delineations, application forms, environmental review compliance, alternatives analyses, mitigation proposals. Imagine a nearly identical process at the state level. Another troublesome aspect is that it’s not yet clear how the new regulations will apply to projects that are also subject to the federal wetland permitting process. For some projects, there could be an inefficient duplication of agency efforts where, to give an extreme example, an applicant may be required to produce two alternatives analyses—one for the federal permitting effort and another for the state. This example and others I could give suggest we’re likely to see analysis inconsistencies and agency confusion as the new regulations roll out. Not helpful for a state still struggling to meet housing and other construction demands.

The Trump administration has been busy chipping away at Obama-era regulations. As of July 2017, Donald Trump has issued over forty Executive Orders and dozens of Presidential Memoranda and Proclamations. The intent of many of these is to remove regulatory burdens on developers, the agriculture industry, and business more generally. One of Trump’s primary targets has been environmental regulations, and wetland regulations in particular have been in the crosshairs. Trump has followed through on a campaign promise to revisit – with an eye toward rescinding – the Obama administration’s Clean Water Rule. That federal pullback from wetland regulations may have unintended consequences in California, which is on the cusp of promulgating new wetland regulations of its own.

Federal Pullback

From their very inception, federal wetland regulations promulgated pursuant to the Clean Water Act have been a target of controversy and consternation. No one on either side of the spectrum has been happy, and standing in the middle of this regulatory angst are the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers, the two agencies tasked with regulating the fill of wetlands for development pursuant to the Clean Water Act. As with most controversial regulations, the wetland regulations evolved over the years, swinging like a pendulum from protective to not-as-protective, as a result of litigation brought by environmentalists and industry interests.

But the real twists and turns of this saga have been punctuated by sporadic pronouncements by the U.S. Supreme Court.

The Court’s most recent decision on wetland regulations came in the form of a fractured opinion in which no majority view emerged. That case, Rapanos v. United States, involved a challenge to the Corps’ determination that a permit was required to fill wetlands slated for development of a mall. The landowner argued that the Corps was overreaching and had no jurisdiction over his wetlands because they were not “waters of the United States,” a term of art that once applied to a wetland gives EPA and the Corps the ability to exercise their permitting authority. The U.S. Supreme Court gave us little to no unifying guidance on what constitutes “waters of the United States.” Of crucial importance now, however, is the plurality opinion authored by the late Justice Antonin Scalia. Citing Webster’s New International Dictionary: Second Edition, Justice Scalia adopted a literal approach to the definition of “waters of the United States,” and declared that the agencies’ jurisdiction under the Clean Water Act includes only relatively permanent waters and wetlands with a continuous surface connection to relatively permanent waters.

In the wake of Rapanos, EPA and the Corps provided some informal guidance to landowners and developers on how the agencies would apply the Rapanos decision. The Clean Water Rule adopted by EPA and the Corps in 2015 emerged from this guidance and from efforts by the agencies to evaluate proposed definitions of “waters of the United States.” The Rule was controversial from the beginning, and it quickly became enmeshed in litigation because of its (both real and perceived) expansion of the agencies’ jurisdiction. The Rule soon became a political target as the 2016 election year got into full swing. Trump fully embraced the issue, and said on the campaign trail in May 2016 that “we’re going to rescind all the job-destroying Obama executive actions including . . . the Waters of the U.S. rule.”

That promise was fulfilled on June 27, 2017. In response to an Executive Order issued by Trump earlier this year, EPA and the Corps formally announced the proposed rescission of the Clean Water Rule and re-codification of the regulations that existed prior to the Rule. According to the Federal Register Notice announcing the rescission, the agencies intend to follow this action with formal rulemaking to “conduct a substantive re-evaluation of the definition of ‘waters of the United States.’” Thus far, no hard-and-fast timeline has been offered for when that proposed “re-evaluation” will be available.

We may not know when it will be available, but we have a good idea of what it will look like. Trump’s Executive Order previewed the substance of the new definition. The Order makes it clear: the agencies must take into consideration Justice Scalia’s opinion in the Rapanos case. This means it is likely the new definition will focus on more literal interpretations of “waters,” which in turn means a much more narrow view of EPA’s and the Corps’ scope of jurisdiction under the Clean Water Act.

In short, the new rule likely will reflect a significant federal pullback on regulating wetlands.

California Pushback?

What does this mean for wetland regulations in California? This question is particularly relevant now because a federal pullback on wetlands regulations is sure to contribute to a perfect storm of events currently unfolding in Sacramento.

For over a decade, the State Water Resources Control Board has been working on a wetland protection and regulation policy to address some of the uncertainty created at the federal level by the U.S. Supreme Court. Rapanos and other Court decisions, most notably Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, or “SWANCC,” created “gaps” in the overall regulation of wetlands by establishing the bright line rule that intrastate, non-navigable, and isolated waters are not “waters of the United States” subject to EPA’s and the Corps’ jurisdiction. Instead, these waters are considered “waters of the State of California,” or simply “waters of the State,” and they are subject to a separate permitting regime established by the State’s Porter-Cologne Water Quality Control Act.

The State Board’s draft wetland policy – recently renamed the State Wetland Definition and Procedures for Discharges of Dredged or Fill Materials to Waters of the State – is a quantum leap in the Board’s wetlands permitting and regulation regime. As its title suggests, the policy proposes a formal definition of “wetlands,” which is not currently defined or applied with any consistency across the natural resource statutes in California. In addition, the policy proposes a permitting process that mimics the onerous, costly, and time consuming process used by the Corps for authorizing wetland fill under the Clean Water Act.

A 2016 draft of the policy received numerous comments objecting to the State Board’s proposed definition of wetlands and permitting process. Notably, the U.S. Army Corps of Engineers raised serious objections to the State Board’s putative authority to issue the policy, citing federal preemption and issues related to the policy’s consistency with its own wetland permitting program under the Clean Water Act. Other commenters raised issues related to the definition of wetlands being too vague, arbitrary, and irrationally expansive, and the process for permitting wetland fills as being too cumbersome and costly.

The State Board responded to these comments and issued a revised draft of the policy on July 21, 2017. Unfortunately, many of the issues raised by the commenters remain unresolved. The Board’s timeline for final approval of the policy is aggressive, particularly given what will likely be a controversial and highly charged approval process. According to its website, the policy is expected to be adopted by the Board sometime “Winter 2017.”

What may motivate the State Board to meet this aggressive timeline, and to charge ahead with a policy many view as vague, onerous, and duplicative, is the federal wetland regulations pullback. In effect, the federal pullback may be responsible for a California pushback.

Nature abhors a vacuum. As the Trump administration narrows the federal government’s ability to regulate wetlands, the State Board may use its new wetland policy to fill the regulatory void that will be created. It can be dangerous to prognosticate too much, but in light of California’s generally pro-environmental politics, one thing is virtually certain – the State will be emboldened to fill the “Trump Gap,” as some of us in the industry have been referring to it, as the federal government begins to pull back from wetland regulations. Somewhat ironically, in California we can expect yet another layer of regulatory oversight as a result of this federal pullback. Stay tuned.

Justice Scalia’s passing may have an immediate impact on the Army Corps of Engineers’ expanded definition of “waters of the United States” under the Clean Water Act. Last October, the United States Court of Appeals for the Sixth Circuit issued a nationwide stay of the Corps’ new broader definition until the matter is fully litigated, citing skepticism over whether the Corps’ definition is scientifically supportable. Recently, the 6th Circuit decided that it will hear the entire case rather than returning it to the district courts for trial. So, we may see a ruling on this regulation much more quickly than we previously anticipated. Should this matter end up before the Supreme Court, it should be remembered that Justice Scalia was a staunch proponent of the idea that the Corps should not exercise jurisdiction over waters that are not truly navigable (e.g., “reasonably permanent flow”).

Two competing initiatives are currently gathering signatures in the City of Los Angeles for placement on the November 8 general election ballot. One, called “The Build Better LA Initiative,” is sponsored by a coalition of labor unions and housing advocates. The second, called the “Neighborhood Integrity Initiative,” is backed by the Coalition to Preserve LA. Both initiatives would have far-reaching implications for future development in Los Angeles.

What will proposed ballot measures do to LA’s skyline?

The Build Better LA Initiative would affect projects requiring general plan amendments or zone changes that permit additional floor area, density, or height. It contains inclusionary affordable housing requirements, mandating affordability for up to 25% of the units in rental projects and up to 40% of the units in for sale housing projects. Offsite affordable housing and the payment of a substantial affordable housing in lieu fee would be options in some instances. The initiative also would impose substantial union labor and local hire requirements on affected projects.

The Neighborhood Integrity Initiative appears to particularly target large development projects. It would impose a two-year moratorium on general plan amendments or zone changes that increase density or intensity. It also would require updating the general plan with various lower-growth principles and limit the City’s ability to approve parking reductions for projects.

Both initiatives take direct aim at the planning and development process in Los Angeles, and either one could dramatically alter development plans across the City.

AB 2502 was introduced in the California Assembly on February 19 principally to offset the 2009 court decision in Palmer v. City of Los Angeles and allow local jurisdictions to impose, as a condition of project approval, rental units affordable to, and occupied by, tenants whose household incomes fall within the lower, very low, or extremely low categories. If adopted, AB 2502 also will apply to for sale residential developments. In 2013, Governor Brown vetoed similar legislation, noting that inclusionary rental requirements can “exacerbate” the challenges faced by low and middle income communities seeking to attract new development. That, however, occurred before the California Supreme Court’s ruling in California Building Industry Association v. City of San Jose upholding a City of San Jose ordinance requiring developers to include affordable units in their residential projects. The San Jose ordinance specifically stated that it would not apply to rental projects until either the Palmer decision was overturned by the courts or the Legislature authorized inclusionary rental housing. It will be worth watching to see if the Governor’s views on the potentially negative impacts of inclusionary housing requirements have changed since 2013.

. . . The Hiring of a New Executive Director for the Coastal Commission

With the termination of Dr. Charles Lester as Executive Director of the California Coastal Commission, all eyes are on the Commission’s selection of his replacement. Lost in the unfortunate characterization of Dr. Lester’s dismissal as a battle between developers and environmentalists was the Commission majority’s stated desire for a more efficient process. Shortly before the Commission hearing on Dr. Lester’s performance evaluation, former Commissioner Jana Zimmer had urged in an Op-Ed that appeared in the Santa Barbara Independent that a “black hat versus white hat” approach to the decision before the Commission was not productive. Given the prominence of the Executive Director position, there should be no shortage of candidates who are effective managers with strong integrity, have credibility with the environmental community, and don’t own either a white hat or a black hat.

Most of us know that the California Department of Fish and Wildlife is the state agency in charge of administering the California Endangered Species Act, which is the state’s version of the federal Endangered Species Act. CDFW is also the state agency that regulates certain work activities within streambeds. Under the California Fish and Game Code, CDFW has regulatory authority over the installation of culverts, bridge supports, erosion controls, or other such work within streambeds. But beware! CDFW’s regulatory reach has been extended significantly. A recent decision by a California Court of Appeal now gives CDFW regulatory authority over the mere taking of water out of its natural flow for agricultural purposes, even if the streambed itself is not altered to facilitate the taking of that water.

By way of background, before a person may start work in a streambed, typically he or she must submit a “notification” to CDFW informing the agency of the nature of the work and any anticipated impacts to waterways or special species habitats within or adjacent to those waterways due to that work. If CDFW determines the work may “substantially adversely affect” any fish and wildlife resources, then the agency will attempt to negotiate a “streambed alteration agreement” with the party. These agreements often include significant, and sometimes quite onerous, conditions and restrictions on development. Moreover, the whole process can take several months and typically requires some form of environmental clearance under the California Environmental Quality Act. Only after both (i) CDFW and the party performing the work have signed the agreement and (ii) all other necessary approvals have been obtained may work in the streambed commence.

In Siskiyou County Farm Bureau v. Department of Fish and Wildlife, the Third District Court of Appeal determined Continue reading →

In addition to the endangered California Red-Legged Frog being named as the official State of California Amphibian (AB 2364), here are some other items of note as we move into 2015:

Tribal Cultural Resources: Under AB 52, for projects for which either an EIR notice of preparation or a notice of negative declaration is filed on or after July 1, 2015, potential impacts on “tribal cultural resources” must be evaluated. For more information on AB 52 and other 2014 CEQA legislation and CEQA court decisions, please click here to see Mike Zischke’s post entitled “CEQA Update: 2014 Case Law And Legislative Developments.”

Fracking Reporting: Effective January 1, 2015, oil and gas operators must submit quarterly water reports to the State’s Division of Oil, Gas & Geothermal Resources providing information related to fracking activities, such as the source, volume, quality, and disposition of all injected water, the quality, treatment and disposal method of all produced waters, and the source, quality, and use of all other treated and recycled waters used in their oil and gas field activities. For the Legislative Counsel’s Digest and full text of SB 1281 click here. For DOGGR’s “Notice to Operators” regarding the requirements of SB 1281, click here.

New Wetlands Mitigation Guidelines from the Corps. The U.S. Army Corps of Engineers (Corps) has issued a comprehensive new set of guidelines for mitigation to be required under Section 404 wetland fill permits. Click here to review the post of Clark Morrison and Scott Birkey on the scope and implications of the new guidelines.

Notaries: Effective January 1, 2015, Civil Code Section 1189 requires new wording and formatting for notary acknowledgements. County Recorders will not record documents that are not notarized in compliance with the new provisions of Section 1189. Click here to review the amended Section 1189. Continue reading →

The U.S. Army Corps of Engineers has issued a comprehensive new set of guidelines for mitigation to be required under Section 404 wetland fill permits. The 2015 Regional Compensatory Mitigation and Monitoring Guidelines for the South Pacific Division USACE became final on January 12, 2015, and will apply to all wetland permits issued throughout the State of California. They will undoubtedly complicate and significantly increase the cost of preparing and implementing mitigation plans for new development.

On one hand, the Guidelines seek to increase the predictability of the Corps’ regulatory process by defining the various technical considerations that should go into the development of wetland mitigation plans. On the other hand, the Guidelines recognize the vastly increased scientific understanding of wetlands that has developed since the Corps’ regulatory program was born in the 1980s. Basically, wetlands have become a much more complicated business over the last twenty-five years. The Guidelines seek to improve the effectiveness of the wetlands regulatory program by harnessing this growing body of knowledge.

Building on nationwide regulations adopted by the Corps in 2008, the Guidelines strongly support a “watershed approach” to mitigation projects, particularly where mitigation is implemented through an in lieu fee program or mitigation bank (rather than a turnkey mitigation project proposed by a developer). This can offer a welcome degree of flexibility in certain instances, particularly where the agencies have developed or are developing regional conservation plans such as those in Contra Costa, Santa Clara, Placer, or Solano Counties. Continue reading →